Senior housing, care costs blamed for jump in poverty rates

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The number of impoverished seniors is much higher than official U.S. Census poverty rates under a new supplemental measure that also considers regional differences in housing prices, care costs and state income distributions.

Only 9 percent of seniors live in poverty nationally, according to the Census Bureau’s official poverty measure. But that measure doesn’t take into account healthcare costs, the impact of taxes, government assistance programs and varying poverty standards based on geographic location, said the Kaiser Family Foundation.

In response to concerns about the official measure’s inaccuracy, the Census Bureau released an alternative “supplemental” poverty measure in 2011 that substantially increases the share of impoverished seniors to 15 percent nationwide. That increase, according to Kaiser, is largely due to the supplemental poverty measure’s consideration of healthcare costs.

The number of seniors living in poverty is higher in every single state using the supplemental measure versus the official measure, Kaiser found in its state-by-state analysis of senior poverty rates.

In 12 states, the number of impoverished seniors at least doubled the official rate.

California, Colorado, Connecticut, Hawaii and Massachusetts are among the states with the highest jumps in poverty rates under the supplemental measure, led by Washington, D.C. with 26 percent of seniors living in poverty.

“The difference between the official poverty measure and the supplemental poverty measure may vary geographically for several reasons, including state income distributions; differences in housing prices, which are factored into the supplemental poverty thresholds; variations in health utilization and costs, since medical expenses are deducted from income under the supplemental measure but not the official measure; and differences in the generosity of state Medicaid programs, which affects medical expenses,” Kaiser wrote.

With more seniors living in poverty using the alternative measure, proposals to achieve deficit reduction that relate to seniors will have a larger impact, and Medicare cost-sharing or scaling back Social Security benefits would likely contribute to higher poverty rates, according to Kaiser.